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Question - A company has the following total cost data available for two levels of production of one type of product:
4,000 units 8,000 units
Purchasing costs RM112,000 RM140,000
Supervision RM25,000 RM41,000
Power RM12,000 RM15,500
The current supervisor can cover production levels up to and including 5,000 units. For higher levels of production, an assistant supervisor costing RM16,000 is also required. For power, a flat fee is payable that will cover all power costs sufficient to produce up to and including 6,000 units.
For production above this level there is an additional variable charge per unit. Calculate the total flexed budget cost allowance for the production of 7,500 units.
The finished goods inventory on June 30 is budgeted to be 17,000 units. Make a production budget for the months July
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